The Nation Newspaper

Tag: Insurance

  • Nigeria has lowest insurance penetration rate worldwide

    Nigeria has lowest insurance penetration rate worldwide

    Nigeria is said to have the lowest insurance penetration rate globally as a very insignificant one per cent of the over 170million population take insurance policy.

    Making this submission at the weekend was Mr. Anselem Chidi Igbo, Chief Executive Officer, Stanbic IBTC Insurance Brokers.

    He spoke at a media parley to formally announce the commencement of its operations.

    According to him, one of the major reasons Nigerians are not favourably disposed to buying insurance policies is usually because of the matters arising from making claims, amongst others.

    These challenges, he stressed, remain a major drawback to building a virile insurance sector in the country.

    He was however quick to admit that insurance companies are partly to blame for some of these problems.

    Thankfully, Igbo said it was its quest to address some of these teething problems that informed its entrant into the sector.

    While announcing commencement of full operations sequel to the granting of a license by the National Insurance Commission (NAICOM) in January 2016, thus paving the way for the firm to offer the full spectrum of insurance brokerage, Igbo said he was optimistic that its operations will raise the bar in the sector.

    “Although we’re the newest baby in the stable of Stanbic IBTC Holdings PLC., our projection is that in the next 10 years we will be among the top five insurance brokage firms in the country,” he assured.

    Echoing similar sentiments, Ibiyemi Mezu, Head, Business Development also acknowledge the fact that at the centre of crisis of identity assailing the sector is the issue of ignorance and lack of education.

    Justifying the need for setting up shop, Mezu said Stanbic IBTC Insurance Brokers is set to provide bespoke risk management and insurance services across the country.

    While enumerating the unique selling proposition of the brokeage firm, Mezu said it has got very strong corporate governance structure, good pedigree and an experience management team. “The role of the broker is to help you better appreciate insurance offerings. We can help to negotiate premiums, risk assessment. We want to set the pace in this sector using a clear-cut strategy that would ride on the back of technology, social media platforms, among others.”

  • ‘Nigeria lacks adequate brokers to drive insurance penetration’

    Mr Kayode Okunoren,  the President,  Nigeria Council of Registered Insurance Brokers (NCRIB), has said the country lacked adequate brokers to facilitate insurance penetration needed for the growth of the industry.

    Okunoren told the News Agency of Nigeria (NAN) at the sideline of the ongoing e-Insurance conference in Lagos at the weekend.

    NAN reports that the conference was organised by Pinets Informatics Ltd with the theme: “Driving Insurance Penetration with ICT.’’

    Okunoren said the number of brokers in the country was not enough to drive insurance penetration to every part of the country.

    According to him, if one broker is allocated to one local government, the country will still not be covered.

    “We have 774 local governments, assuming a broker is allocated to one local government, it will not still be enough because we have just 500 brokers in the country.

    “The question now is that, is a broker enough to cover a local government?

    “And if we are to deepen insurance penetration we need more brokers,” he said.

    He urged the National Insurance Commission (NAICOM) to grant operating licences to more brokers for optimal productivity.

  • Minister to insurers: leverage ICT penetration to grow insurance

    Minister to insurers: leverage ICT penetration to grow insurance

    The Minister of Communications, Adebayo Shittu has urged insurers to latch on the penetration of information communication technology (ICT) penetration to deepen insurance penetration in the country and grow its contribution to the national gross domestic product (GDP).

    He lamented that the potential of the insurance industry is still far from being harnessed. Speaking on: ‘Driving Insurance Penetration With Information and Communication   Technology’ at the e-Insurance Conference organised by Pinet Informatics Ltd at the Sheraton Hotels and Towers, Lagos yesterday, he said the contributions of the insurance sector, which provides support to the financial institutions, has been disproportionate to the size of the Nigerian population and size.

    “The insurance sector, despite being a major driver of business growth that provides critical support systems to the financial market, has not fared well given the current size of the economy and population.

    “Information available to me indicates that there are less than 1.5 million insurance policyholders, representing a paltry 0.9 per cent of a population of well over 170 million citizens. Similarly, the gross premium of the sector is said to be less than N500 billion, implying that the sector contributes less than one per cent to national GDP,” he said.

    He expressed confidence in the performance of the ICT sector as the fourth pillar of the economy and a sector that recorded positive growth last year in spite of the recession. He said ICT tools could be used to develop innovative solutions to improve insurance practice, increase product development and expand market activities in the insurance sector.

    The suggested process, according to the minister, includes improved operational efficiency(including smooth communication between clients and company officials), office automation and optimisation, digital marketing and online marketplace for assessment and purchase of insurance packages.

    Shittu said in other parts of the world, e-insurance has already been fully adopted and various insurance products can be obtained through online insurance portals, which are programmed to tailor unique insurance packages to the distinctive individual requirements of prospective customers.

  • IT, insurance experts for e-insurance confab

    About 45 experts in Information Technology (IT) and insurance industries have indicated interest to speak at the maiden e-Insurance conference being organised by Pinet Informatics.

    Billed to hold on March 23, the speakers would be discussing issues affecting insurance growth in Nigeria, how to re-build customers’ confidence in insurance business and how technology could act as a catalyst in boosting insurance business in the 21st century, where technology innovation is the key driver.

    Some of the technology frims that have indicated interest to share their wealth of experience at the eInsurance conference, include MainOne, MTN, Airtel, Vodacom Business, VDT Communications, Google,  among others.

    According to the organisers, apart from tech firms, major insurance firms operating have also indicated interest to speak at the conference. The Chairman of Nigeria Insurance Association (NIA), Mr Eddie Efekoha will chair a panel discussion in which  managing directors of leading insurance firms are slated as panelists.

    Aside speakers, most IT and Insurance companies have also indicated their interest to participate at the conference and to sponsor the event, which promises to digitally transform insurance business in Nigeria.

  • NAICOM, NCC to deepen insurance penetration

    NAICOM, NCC to deepen insurance penetration

    The National Insurance Commission (NAICOM) and the Nigerian Communications Commission (NCC) yesterday vowed to reinstate the sales of insurance through platforms of telecommunications firms.

    Head, Corporate Affairs NAICOM, Rasaaq Salami said the move will enable the Commission license telcos and ensure effective distribution channels for sale of insurance products.

    According to him, the agreement was reached yesterday when the Commissioner for Insurance, Mohammed Kari, led the management of NAICOM to the Headquarters of the NCC in Abuja.

    He said NAICOM team was received by the Executive Vice Chairman (EVC) and Chief Executive of NCC, Prof. Umar Danbatta, noting that the NCC at the meeting, endorsed the collaboration between insurance firms and telcos in the sale of insurance products.

  • Why insurance uptake is low in Nigeria, by experts

    Why insurance uptake is low in Nigeria, by experts

    Lack of trust between the subscribing public and insurance companies and absence of awareness campaign to inform the subscribing public on the benefits of taking policies are reasons insurance has failed in Nigeria, an expert, Prof Matthew Atobe has said.

    Atobe who is an authority in consumer protection matters, made this known in a paper titled: “Insurance Consumers in Developed Economies, an  Insurance Consumer’s Experience in the United States of America and Lessons for Nigeria” presented at an insurance conference in Lagos.

    According to him, this is unlike the United States (U.S.) where insurance companies contribute more to the growth of the economy.

    He identified other problems as absence of professionally  trained insurance experts, religious culture, traditional culture or norms, ignorance, illiteracy, absence of infrastructure, lack of insurance companies to cover huge damages or losses, poor technology and the deliberate behaviour of the insurer and the insured not to disclose full material fact to process, pay and receive claim.

    For a rebirth to occur in the industry, the expert said there is need for equity, increase in operating capital to underwrite huge and multiple policies and also to write-off and cover huge multiple losses and or damages.

    He said: “There is also need to strengthen insurance capacity building centres providing technical and continuous professional development, peer review mechanism, uniform language and innovation in the area of marketing, full funding of insurance investigators, target rural emerging/promising communities, among others.

    “There is no other industry that may have contributed more to the growth of the economy of United States than insurance companies. You may not be able to confirm this experience unless you have filed a claim against an insurance company as a result of loss or damage caused by events that you, an insured party cannot control. The role of insurance is to reduce risks.

    “Insurance companies are risk takers. Yes it is true, you invest so much on insurance premiums, but the risk you suffer you transfer to insurance company when a loss or damage occurs. Insurance companies operating in U.S. provide great deal of benefit to the U.S. economy. “

    Another insurance expert, the Group Head, Energy and Special Risk, International Energy Insurance (IEI), Jude Modilim while delivering his paper titled: “The Economic Importance of Insurance in National Development” added that the development of the industry is related to economic growth.

    He stressed that the industry must take definite steps to improve contribution to GDP and make it more attractive to new entrants.

    Speaking on the economic importance of insurance in national development, he said it generates financial resources for investment in bonds,             treasury bills, stocks and real estate particularly through the instrumentality of life insurance.

    He further stated that life insurance enables systematic savings while insurance turn accumulated capital into productive investments. It is an important source of capital formation and a key source of long term capital, encouraging the growth of capital markets.

    He noted that the funds are used in individual development to promote economic growth. It also encourages loss of mitigation, financial stability, and promotes trade and commercial activities.

    “The industry is a powerful engine for job creation. According to Dr. Ngozi Okonjo-Iweala the industry has the ability to create jobs for 100,000 people in the next three years and more than 300,000 people in the next decade. There is need to unleash the latent energies of the industry to create more jobs and boost economic development

    “Insurance enhances peace of mind. The security wish is the prime motivating factor to work more. Tension leads to unpleasant reaction causing reduction in work. By means of insurance a number of the uncertainty that centers on the wish for security and its attainment may be eliminated or significantly reduced.

    “It protects mortgaged property. In the event of death of the owner of the mortgaged property, it gives the lender comfort. It also eliminates dependency on the death of a husband or father. In the event of destruction of property by fire or other means. Economic independence of the family is reduced, if not lost totally. It provides wished amount as against deposited amount in the bank and contributes to Internally Generated Revenue (IGR) through payment of taxes.”

  • ‘Trumpcare’ a mystery as insurance battle looms

    Republicans and Democrats have honed their warring Obamacare messages, but there are few clues about what happens after the GOP-controlled Congress and President-elect Donald Trump follow through with their promise to repeal the law by the end of next month.

    Democrats, buoyed by a Capitol Hill pep talk yesterday from President Obama, made their position clear: If the repeal sends the health care markets into a tailspin and strips millions of coverage, they will label the fiasco “Trumpcare” and hang it around Republicans’ necks. They also warned that the repeal would imperil other popular bedrock programs, hurting the middle class and rural Americans.

    “The president did a great job of reminding everybody of how the ACA, Medicaid, Medicare and Social Security all link,” said Bay State U.S. Rep. Richard E. Neal after the meeting with Obama. “They are all linked in the public’s mind, and subtracting or fracturing any part of that guarantee changes the whole argument.”

    Republicans counter that Democrats broke the system with a law that raised premiums, lowered coverage and caused insurers to cut and run – leaving Americans with higher costs and fewer options.

    “We are talking about people’s lives. We are talking about families,” said Vice President-elect Mike Pence after huddling with congressional Republicans. “But we are also talking about a policy that has been a failure virtually since its inception.”

    • Culled from Boston Herald

  • Recession pushes insurance claims up

    Insurance companies paid more claims last year compared to previous years as a result of recession, Chairman, Nigerian Insurers Association (NIA), Eddie Efekoha, has said.

    Efekoha, who made this known while speaking with reporters in Lagos, said the high exchange rate has also pushed up insurance claims.

    He explained that premium of insurance policies, whose claims were presently being settled, were paid when the exchange rate was low.

    He further said the economic recession has impacted negatively on insurance business as most people now place insurance last on their scale of preference.

    He added that insurance companies are experiencing fraudulent claims as some people consider it as a source of making quick money to meet their financial conditions.

    He said: “Insurance operators would continue to live up to their claims responsibilities. Insurance should be considered first in decision making, especially now that it is difficult to replace lost items due to high cost.

    “We also call on the government at all levels to leverage on insurance in finding the way out of recession.”

    NIA Director-General added that in other for underwriters to outsmart fraudsters, operators now carry out adept investigations to ascertain genuine claims.

    He noted that amidst challenges, operators are also living up to their responsibilities in paying genuine claims, stressing that the vices been perpetuated by fraudsters would not deter insurers in settling of claims of those who actually need to be indemnified.

    Managing Director, Anchor Insurance Plc, Mayowa Adeduro stressed that insurance companies bear most of the pains in recession.

    “The exchange rate has increased our claim ratio. This is because people are driving on the road, they are depressed and are no longer concentrating. Also, people will go to any length to make claim just to have extra money from the sector.

    “So, we should not expect reduced claims in the industry, rather, expect premium loss. The only company that can withstand it is only those companies that have successfully diversified their portfolios because in every recession, not all the sectors of the economy are affected at the same time. Some like the food sector will grow because people will turn to food,” he said.

  • NAICOM: Sanitising the insurance sector

    IR: Cleaning the Augean stable in any society, sector, domain or country is an arduous task. This is so, because in most cases, corruption usually fights back and when it fights back, it fights vigorously in a bloody manner such that the reputation and good name of whoever is involved is not given the slightest thought.

    As Commissioner of Insurance, National Insurance Commission (NAICOM)  Kari has not rested on his oars to sanitise the insurance industry. As the Deputy Commissioner in NAICOM, one recalls that his first task was to sign the memo to prohibit illegal payments hitherto seen in the sector. Ever since his appointment as Commissioner in July 30, 2015, he has aligned with change mantra of President Muhammadu Buhari. He believes that the industry cannot be left behind in the scheme of things.

    While urging operators and other stakeholders to adhere strictly to the observance of the industry’s codes of conduct and ethics for a healthy practice of the insurance profession, he promised that NAICOM as a regulator will remain committed to high standard of professionalism and ethical behaviour so as to regain the confidence of policyholders and increase insurance contribution to the GDP. He believes that the industry must win the public apathy to the business of insurance, desist from unwholesome practices in the discharge of itsa responsibilities to the insured by playing as true professionals.

    The commission under him has since increased its oversight on the operators. In years past, more insurance brokers operated without valid license than those with license. Today the story is different.  He enforced the code of corporate governance for insurance companies which was issued in 2009 but was not enforced. The re-launch of the Market Development and Restructuring Initiative (MDRI) which seeks to make Nigeria the insurance hub of Africa has reached an advanced stage.

    Just recently, Kari had a running battle with insurance companies and brokerage firms for not capitulating to the wishes of the cabals in the insurance industry. Expectedly, these powerful interests not only have huge resources at their disposal, they deploy it to fight his efforts to rid the insurance industry of corruption. Even with the President’s strong body language against corruption, these powerful interests in the insurance sector seem to not to bother. However, with the support of the President, we have a strong advocate of honesty, probity, dedication and excellence to purge the cancer in the system and drive the insurance industry to greater heights.

     

    • Alwan Hassan,

     Abuja.

  • NDIC raises insurance cover for PMBs by 150%

    NDIC raises insurance cover for PMBs by 150%

    •Advises ‘dead banks’ depositors to file for claims 

    The Nigeria Deposit Insurance Corporation (NDIC) has increased the deposit insurance coverage for Primary Mortgage Banks (PMBs) by 150 per cent to N500,000.

    The coverage figure, previously at N200,000, was raised to N500,000 to stimulate the confidence and patronage of mortgage customers.

    NDIC Managing Director, Umaru Ibrahim who disclosed this in Lagos, said the corporation will continue to review its deposit insurance coverage for depositors of PMBs in the event of failure.

    “The current coverage level represents an increase of 150 per cent over the earlier level of N200,000. Thus, the gap of the coverage between the commercial banks and PMBs is now bridged with the envisaged increase in patronage of PMBs,” he said.

    Speaking at the 2016 sensitisation workshop for PMBs’ operators, he said the corporation’s records showed that 15 out of 42 PMBs are yet to meet their premium payment obligations to the corporation. He urged the affected operators to promptly pay their premium to the corporation in line with regulatory guidelines.

    Meanwhile, the NDIC yesterday in Kano urged depositors who lost their money in liquidated banks to file for claims through the zonal offices of the corporation or any of the 10 banks appointed for the payment across the nation.

    Ibrahim who spoke through the Director, Assets Management at NDIC, Alhaji Bashir Umar at NDIC Special Day at the ongoing 37th Kano International Trade Fair named the appointed banks to include First Bank of Nigeria, United Bank for Africa, Zenith Bank, Wema Bank, Heritage Bank, Union Bank, Fidelity Bank, Skye Bank, Unity Bank and Diamond Bank.

    He lamented the activities of ‘Wonder Banks,’ just as he warned members of the public to be wary and desist from patronising banks which he described as fraudulent.

    “I wish to sound a note of caution to discerning members of the public to beware and avoid any contact with these fraudsters as many unsuspecting public are still falling victims to the mouth-watering offers of quick returns. Members of the public are therefore advised to patronise insured banking institutions that display NDIC stickers in their banking halls or entrances,” Ibrahim said.

    He said the corporation has the capacity to sustain its efforts in ensuring that insured institutions are put on the part of sustainable growth and development, adding that it is an exercise that would depend largely of premium contribution.

    The corporation, he said, has also deployed the Differential Premium Assessment System  (DPAS) in pricing the deposit premium of PMBs.

    He said the DPAS centres on strong Enterprise Risk Management Framework (ERMF) and classifies banks into various risk buckets and apply different premium rates depending on the level of risk involved.

    He said the DPAS will mitigate insurable risks for PMBs as well as encourage effective enterprise risk management.

    According to him, the ERMF would include sound strategic planning and transformative business model and addresses the issue of moral hazard which guarantees caution and avoidance of excessive risk taking in running a PMB.

    Ibrahim said: “To the operators in particular, the risk-based premium system allows the institution to pay much less premium than would have been the case, had the alternative, flat rate system had been adopted.

    The NDIC boss said the corporation is the sole agency empowered to guarantee depositors’ funds in the deposit-taking financial institutions.